Google to Launch Subscription Streaming Music Service

Seeks to compete with Pandora, Spotify

Google, setting its sights on the hot digital streaming market dominated by Spotify and Pandora, will launch its own subscription music service. The tech giant is expected to announce the new streaming service today at its annual I/O developers conference.

The Verge broke the news Tuesday in advance of the event, citing music industry sources and reporting that Google has inked deals with the two largest record companies, Universal Music Group and Sony Music Entertainment (Warner Music Group has been on board since March).

Google is developing separate services for YouTube and its Android media hub, Google Play. Google has seen only limited success for its download store, but wants to tap into the rapidly growing music streaming market. Swedish music service Spotify has 24 million users and 6 million premium users. Pandora has more than 200 million users, most of whom use the free service. The New York Times reported that Google's streaming service will not have a free tier.

While Google Play is relatively new, YouTube is already one of the most popular music services in the world. YouTube has yet to charge users, choosing instead to sell ads against the videos and give record companies a cut of the ad revenue. YouTube, which last week added paid video channels, will develop its own subscription music service separate from that of Google Play.

Today's announcement will give Google the opportunity to upstage Apple while record company negotiations are stalling the release of its own subscription music service.